Lord Conrad Black of Crossharbour, who renounced his Canadian citizenship to infiltrate the British nobility, could be on the verge of ceding his debt-beset Hollinger International newspaper empire to a Brooklyn-born business baron.
Financier Nelson Pelz is understood to be conducting due diligence on Hollinger's businesses -- yet the latter insisted Tuesday that “there had been no substantive talks with Nelson Peltz”.
Although there is no certainty that Pelz will take a strategic stake in closely-held Hollinger, the one sure thing is that Black needs the cash -- and soon. Hollinger faces a C$92 million ($70.47m; €60.74m; £42.13m) payment due in spring 2004 and has twice previously pulled the plug on funding talks with potential white knights.
Earlier this year a deal with Southeastern Asset Management, Hollinger's largest institutional investor, looked set for inking but the former's insistence that Black cede a degree of control is said to have triggered a walkout. In October he was in short-lived discussions with Bain Capital and earlier this month quit talks with a group of private equity investors [WAMN: 05-Nov-03].
The sticking point in all negotiations is thought to be Hollinger's preferential voting structure whereby the parent company (Hollinger Inc), dominated by Black, his family and other empathetic interests, controls an overwhelming 73% of the votes while holding a mere 32% of its stock.
Pelz, said to have a personal worth of $950m, declined to comment. But it is thought improbable he would accept any deal that offered less than a controlling interest in the newspaper group.
Data sourced from: Times Online (UK); additional content by WARC staff